A Documentation of the Experiences and a Critical Analysis of the Changing Shape of Tier One Automotive Supply

Abstract

The author describes his work with VDO North America LLC, a German-owned Tier One automotive supplier, as well as critical analysis of the many changes taking place in the automotive industry, and their effects on the Tier One suppliers. He worked as a part of the sales team performing various tasks such as market research, account management, and quoting to the "Big Three" automotive manufacturers. Included is research into the volatility caused by automotive manufacturers outsourcing more research and development and assembly than ever before, placing a large burden on Tier One suppliers. This paper details the effects of these changes on Tier One supply, such as merger-mania in the Tier One ranks and the increased utilization of modular assembly. It also looks at the future for Tier One suppliers as well as the industry as a whole, and offers strategies for success over the next ten years. The Tier One suppliers will have to face the fact that many of them will not survive in their current form. Rather, many of these companies will have to form alliances or provide niche products and services in order to remain competitive in an increasingly global market.